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How Capital Crushed Labor

By Patrick J. Buchanan Once, it was a Labor Day tradition for Democrats to go to Cadillac Square in Detroit to launch their campaigns in that forge and furnace of American democracy, the greatest industrial center on earth.
Democrats may still honor the tradition. But Detroit is not what she was, not remotely. And neither is America.
Not so long ago, we made all the shoes and clothes we wore, the motorcycles and cars we drove, the radios we listened to, the TV sets we watched, the home and office calculators and computers we used.
No more. Much of what we buy is no longer made by American workers, but by Japanese, Chinese, other Asians, Canadians and Europeans.
“Why don’t we make things here anymore?” is the wail.
Answer: We don’t make things here anymore because it is cheaper to make them abroad and ship them back.
With an economy of $14 trillion, we may still be the best market in the world to sell into. But we are also among the most expensive markets in the world in which to produce.
Why is that? Again, the answer is simple.
U.S. wages are higher than they are almost anywhere else. Our health, safety and environmental laws are among the most stringent. Our affirmative action demands are the most exacting, except possibly for those of Malaysia and South Africa.
Does the cost of production here in America alone explain the decline in manufacturing and stagnation of workers’ wages?
No. For since the Revolution, America has had a standard of living that has been the envy of the world. From the Civil War through the 1920s, as we became the greatest manufacturing power the world had ever seen, our workers enjoyed pay and benefits that were unmatched anywhere.
Yet our exports in those decades were double our imports, and our trade surpluses annually added 4 percent to the gross national product. How did we do it?
We taxed the products of foreign factories and workers and used the revenue to finance the government. We imposed tariffs of up to 40 percent on foreign goods entering our market and used the tariff money to keep taxes low in the United States.
We made foreigners pay a price to get their products into our market and made them pay to help finance our government. We put our own country and people first.
For corporate America, especially industrial America, this was nirvana. They had exclusive free access to our market, and foreign rivals had to pay a stiff fee, a tariff, to get their products in and try to compete with U.S. products in the U.S. market.
What happened to this idea that made America a self-sufficient republic, producing almost all it consumed, a nation that could stay out of the world wars as long as she wished and crush the greatest powers in Europe and Asia in less than four years after she went in?
A new class came to power that looked on tariffs as xenophobic, on economic patriotism as atavistic and on national sovereignty as an antique idea in the new world order it envisioned.
By 1976, editorial writers were talking about a new declaration of interdependence to replace Thomas Jefferson’s Declaration of Independence, which was now outdated.
The new idea was to replicate America on a global scale, to throw open the borders of all nations as the borders of the 50 states were open, to abolish all tariffs and trade barriers, and to welcome the free flow of goods and people across all frontiers, thereby creating the One World that statesmen such as Woodrow Wilson and Wendell Willkie had envisioned.
By three decades ago, this globalist ideology had captured both national parties, a product of universities dominated by New Dealers.
But why did corporate America, with its privileged access to the greatest market on earth, go along with sharing that market with its manufacturing rivals from all over the world?
The answer lies in the trade-off corporate America got.
Already established in the U.S. market, corporate America could risk sharing that market if, in return, it could shift its own production out of the United States to countries where the wages were low and regulations were light.
Corporate America could there produce for a fraction of what it cost to produce here. Then these same corporations could ship their foreign-made products back to the USA and pocket the difference in the cost of production. Corporate stock prices would soar, as would corporate salaries — and dividends, to make shareholders happy and supportive of a corporate policy of moving out of the USA.
Under globalization, America’s investor class could and did get rich by the abandonment of America’s working class.
America is in a terminal industrial decline because the interests of corporate America now clash directly with the interests of working America — and, indeed, with the national interest of the United States.
And both parties are either oblivious to or indifferent of what is happening to their country

I guess Mr Patrick Buchanan summarized the situation pretty well. I will say that the labor transition to an extreme, the politicians level the middle class to the stone age. The sad reality is that interests of wall street and national interests are converging to crush and to destroy the middle class.

My observations through my posts are just similar to this article.

In fact we are right now in the middle of a huge world wide class war that only a few are aware.

Those who can make you believe absurdities can make you commit atrocities.

The saddest part of the issue is that 50+ years of Democrat domination in Detroit, plus the continual greedy and irrational demands of unions, are what destroyed Detroit's economy. Prior to the Democrat takeover, it was the most prosperous city in the USA.

There has to be a balance for the system to work, but whenever the balance tips too much to one side or the other, nothing works well.

Unions think they are accomplishing something great when they win wage contracts that are 50% higher than similar non-union jobs, but in reality, they are pricing themselves out of the world marketplace, and driving jobs overseas. Businesses are not left with any choice other than to follow their overseas competitors to cheap labor sources. If they do not do that, they will be driven to extinction. It is not possible for a labor-intensive industry to survive in a world economy when it is forced to utilize overpriced and non-competitive labor.

In many ways the global economy is what is destroying the economies of the former economic superpowers. It is a redistribution of wealth scheme on a much grander scale. Prior to the 1980s, we didn't have a real global economy because it was very difficult to manufacture most products overseas. The global economy changed everything.

Wordkers are finally starting to get smart and realize that unions are not always in their best interest. The unions are tyring to get a foothold in Tennessee, a Right to Work state where most Japanese and German auto manufacturers have set up USA manufacturing operations. Operating in Tennessee without unions has given them a huge long-term cost advantage over unionized USA auto manufacturers. Plus it creates jobs in Tennessee. This is exactly what we need. No foreign auto company sets up manufacturing operations in union controlled states.

The saddest part of the issue is that 50+ years of Democrat domination in Detroit, plus the continual greedy and irrational demands of unions, are what destroyed Detroit's economy. Prior to the Democrat takeover, it was the most prosperous city in the USA.

There has to be a balance for the system to work, but whenever the balance tips too much to one side or the other, nothing works well.

Unions think they are accomplishing something great when they win wage contracts that are 50% higher than similar non-union jobs, but in reality, they are pricing themselves out of the world marketplace, and driving jobs overseas. Businesses are not left with any choice other than to follow their overseas competitors to cheap labor sources. If they do not do that, they will be driven to extinction. It is not possible for a labor-intensive industry to survive in a world economy when it is forced to utilize overpriced and non-competitive labor.

The only balance for the system to work is a well regulated system including smart regulations negotiated and accepted by both parties.

Did you worked in factory before Top? I assure you that it is a very hard working condition that often have health consequences and handicaps. Like any hard work, its deserve good pay, and if there are unions, it is because employers abused their power to pay peanuts.

I don't understand what you said, because regarding the article from Mr Patrick Buchanan, it looks like Corporate America did pretty well before even with unions.

"For corporate America, especially industrial America, this was nirvana. They had exclusive free access to our market, and foreign rivals had to pay a stiff fee, a tariff, to get their products in and try to compete with U.S. products in the U.S. market."

I will also point out what Plutarch said: "An imbalance between rich and poor is the oldest and most fatal ailment of all republics.". Some people are working hard to create a Chaos, just see how they divide the people...

Those who can make you believe absurdities can make you commit atrocities.

Wordkers are finally starting to get smart and realize that unions are not always in their best interest.

Honestly when political partisans go on the negotiation table, and that includes all the groups behind this story from UAW to Grover Norquist’s Americans for Tax Reform, workers are divided.

I sincerely believe that politics shouldn't involve Union negotiations, unfortunately that's why most of the time things are odd. Worker Union should represent workers and employers Union should represent employers in their own field.

For example in France employers and workers have their respective unions, so all the negotiations are really between knowledgeable hagglers.

Those who can make you believe absurdities can make you commit atrocities.

Did you worked in factory before Top? I assure you that it is a very hard working condition that often have health consequences and handicaps. Like any hard work, its deserve good pay, and if there are unions, it is because employers abused their power to pay peanuts.

As a matter of fact I worked in several factories both while in high school and shortly thereafter. I would not call any of the jobs hard work, but they were tedious and monotonous. Today, the heavy work is done by machines and robotics, especially in auto manufacturing.

We have OSHA in the USA, which regulates working conditions in factories. 50+ years ago there were serious health consequences with factory jobs, but that is rare today. Construction work is one of the most hazardous jobs today.

Originally Posted by Franc Tireur

I don't understand what you said, because regarding the article from Mr Patrick Buchanan, it looks like Corporate America did pretty well before even with unions.

I did not say anything contrary to that. Corporate America did much better before there were unions, but that was more than 70 years ago. The fact is that businesses that do not do well do not survive. Today we just see the survivors, not the businesses who could no longer compete. Detroit has turned into a ghost town and the largest ghetto in the USA primarily because of 50+ years of dominant union and Democrat rule. They have destroyed thousands of businesses and millions of jobs due to their demands that priced themselves out of the market. Before the unions and Democrats took over, Detroit was the most prosperous city in the USA per capita.

Keep one thing in mind with respect to unions. In the USA they are business just like any corporation. Most have been dominated and run by crime syndicates since the 1950s. Contrary to some opinions, they are not primarily in the business of improving the lives of workers. That is the false front that they portray. They are in the business of building their business, enriching themselves, and building power, just like any crime syndicate. The only difference is that they are doing it legally.

Back in the 1950s, many of the the major crime syndicate families went "legitimate", as they call it. That means they took over control of the unions and certain types of businesses, such as trash removal, shopping malls and casinos in Las Vegas and Atlantic City. I grew up with the kids of the major crime syndicate families in Chicago and this was common knowledge.

"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." -- Benjamin Franklin

Detroit has turned into a ghost town and the largest ghetto in the USA primarily because of 50+ years of dominant union and Democrat rule. They have destroyed thousands of businesses and millions of jobs due to their demands that priced themselves out of the market. Before the unions and Democrats took over, Detroit was the most prosperous city in the USA per capita.

I understand what you mean. The problem is that not all states had unions and it didn't prevent corporate America and all corporate European to flee overseas.

I don't know if it is American to think that as a human being, work is a universal right, but for the French it is.

Those who can make you believe absurdities can make you commit atrocities.

I understand what you mean. The problem is that not all states had unions and it didn't prevent corporate America and all corporate European to flee overseas.

In the USA the unions have no ability to stop the movement of jobs overseas. That is a bargaining point in negotiations. If they did have that power, the result would be more major companies who went out of business and fewer jobs for workers. Try driving through Detroit. It looks like a war zone.

Originally Posted by Franc Tireur

I don't know if it is American to think that as a human being, work is a universal right, but for the French it is.

We have Right To Work states and non Right To Work states in the USA. The Right To Work states are the ones that protect workers' rights by not forcing them to join unions in order to get a job. The non Right To Work states that force workers to join unions are mostly heavily Democrat states that are currently in the most financial trouble. Illinois, for example, has an unfunded government union pension liability of over $100 billion because the unions negotiated lavish retirement pensions that the Democrats in charge never funded.

I grew up in Chicago and was a member of the International Brotherhood of Electrical Workers (IBEW) and the Teamsters (truck drivers union) before I was 21. My father and grandfather were union workers their entire working lives. I am very familiar with unions. Also, as I said before, a lot of the kids of the crime syndicate families that I went to school with are now in management positions in the Chicago unions. If you ever watched the Sopranos, Tony Sopranos' businesses were a stripper club, labor unions (they never said which ones) and a trash removal company. This was not made up by Hollywood. It was a reflection of the real connection between unions and crime syndicates.

I think the word "union" means something different in the USA than in Europe. We do not have employer unions. Unions get a percentage of every union member's paycheck, which means the more money they extract from employers, the more money they make. Most unions donate large amounts of money to Democrats. Democrats, in return, strongly support unions. This is no different that the the way the pharmaceutical lobbies, energy company lobbies or financial sector lobbies work. It is all part of the overall corruption within the political system. A union is no different than the large corporations, banks and financial companies that you seem to view as the real problem.

"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote." -- Benjamin Franklin

It is all part of the overall corruption within the political system. A union is no different than the large corporations, banks and financial companies that you seem to view as the real problem.

You know, I won't blame unions, because the whole system in most western countries is corrupt to the bone. Money printed from thin air, politicians actively working against their own people, nomad corporate predators going around the world to exploit, natural resources benefits not shared with inhabitants, etc

The whole system is rotten, but hey we have to survive in it.

Those who can make you believe absurdities can make you commit atrocities.

Do they have any hold anymore? After Jimmy Hoffa's disappearance I have not heard of that union ever talked about. You see trucks on the road but a lot of small companies and even the big trucking companies that I see around here. (Prime, CCC, Wagner, JB Hunt ) I don't think the drivers are union.

I worked for UPS and was a member of the Teamsters when I was in high school. I don't think Jimmy Hoffa's disappearance had much to do with it, but Jimmy Hoffa was more radical than other union leaders. His son, Jams Hoffa, is in charge of the Teamsters today. See what I mean about crime family control?

You do not hear much about them because they have tried to cripple the economy with national strikes like they did a couple of times in the past. They were even shooting drivers who ignored the picket lines during one of their major strikes. The bad reputation that resulted just added more more nails to their own coffins and drove public opinion further against unions.

Only 11% of USA workers are represented by unions, and the majority of those are government employees. In 1980, 20.1% of workers belonged to a union.

Unions have been in decline in the USA for many years because they no longer serve a useful purpose in most industries. They put too many of their employers out of business and drove industries that the USA dominated out of the country.

Their remaining stronghold is with the federal government, which is why on average federal worker make 50% more than equivalent workers in the private sector and have lavish retirement programs that are mostly unfunded. No corporation is allowed to have unfunded pension programs. The Postal Workers union is the only government union that I know of that is required to be fully funded. The government unions are driving the country out of business the same way that they drove other employers out of business in the past. The only reason they are so strong in government is due to continual support from Democrats. The only reason that Democrats support them is due to the kickbacks they get in the form of campaign contributions. it is a symbiotic relationship where the only losers are the taxpayers who ultimately pay the cost.

Union support is what got Obama reelected, which is why Obama is so strongly pro-union. He was reelected with 4 million fewer votes than he received in 2008. If you remember during the campaign, his campaign donations were not going anywhere and he was far short of Romney. During the last few months, unions donated tens of millions of dollars and 100,000 union workers who canvassed the ghetto areas in the major cities and got large numbers of people to vote for Obama who never participated in elections in the past. The Democrats focused 90% of their money on the swing states, where traditional wisdom says that whoever wins the Independent vote, also wins the election. Romney won the Independent vote in 7 out of the 9 swing states, but still lost the popular vote in most of these states because of new voter registrations.

We also had a record number of election fraud issues reported in 2012. There were over 5,000 voter fraud issues reported just on election day, but no follow-up or prosecutions I am aware of except for one Democrat poll worker who had been working the polls for 20 years and openly bragged about voting for Obama multiple times. The only reason she was prosecuted was to assure that no one else reveals how easily voter fraud works and how common it is.